5 On Your Side

NC insurance rate changes 'very frustrating,' commissioner says

Posted July 24, 2014

— When something terrible happens to a house, most people count on insurance to make it right, but coverage in North Carolina is getting tricky.

WRAL’s 5 On Your Side reported Monday about “consent to rate” forms that insurance companies are sending homeowners, demanding rates higher than the maximum approved by the state.

Fuquay-Varina resident Randi Gordon said she was shocked to get one after 16 years with Travelers insurance.

"I have never had a claim,” she said. “Never, nothing.”

State law allows insurers to charge up to 250 percent above the maximum rate set by North Carolina Insurance Commissioner Wayne Goodwin if homeowners sign that consent form.

“It is very frustrating because that law was there for exceptional purposes, and now it's being used as the rule,” Goodwin said.

WRAL’s 5 On Your Side has learned most, if not all, insurance companies will send the forms out as customers come up for renewal because they don't feel the state-approved rate increases are adequate.

State Farm, North Carolina's second largest insurer, told 5 On Your Side that all customers will get a form. The company calls it "a tool that allows us to continue to make coverage available," saying if a customer feels the increase is unfair, they can shop around.

In many cases, the increase is just $1. So what's the big deal about $1? Once you sign the form, insurers can increase your future rates up to 250 percent without further approval.

The decades-old law was intended for high-risk customers. It appears insurance companies are now using it as a way to bypass the rate change process.

“It’s ultimately up to the lawmakers to decide whether to change the law, but I do think this is a great enough concern by the insurance industry and of course, especially by the public, that it needs to be looked into,” Goodwin said.

So what can you do? Shop around. You can also raise your deductible and bundle your coverage to help lower your rates.


This story is closed for comments.

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  • teleman60 Jul 25, 2014

    Shouldn't our GA be looking into this MULTIMILLION DOLLAR Corp insurance problem?

    I am cautiously aware of the impending doom of Possum Drop bombs, and pregnant motorcycles and even the hunters who are NOW allowed to hunt with silencers so as not to awaken sleeping neighbors before they may be wounded.

    With all those MAJOR ISSUES now put to bed maybe the GA can visit the insurance issues that could cost NC homeowners HUNDREDS OF MILLIONS paying for the rebuilding of beach front properties instead of having those owners pay their own insurance increases.

  • Christopher Byrne Jul 25, 2014

    View quoted thread

    Tsk, Tsk, Tsk. You, my friend, obviously do not understand the purpose of insurance....

  • teleman60 Jul 25, 2014

    One reason this is happening is the hurricanes that affect NC coast and those COASTAL PROPERTIES. The situation is such that they NEED to come up with money to pay for all the storm damaged homes on the coast.

    Allstate told me they weren't writing policies in NC anymore (true?) - I was with them 18 years when they raised my rates and I left.

    The real problem is the coast - like Hwy 12, NC just KEEPS ON SPENDING MILLIONS of tax dollars rebuilding.

    Same thing with homes out there. I hate to say it but there ought to be a rule on how many times you can rebuild beach houses destroyed by hurricanes.

    Insurance companies have developed an answer - they are going to GOUGE US ALL for every INSURED beach property.

  • Burt Whitley Jul 25, 2014

    I don't remember singing any form from Nationwide but our homeowners insurance went up about 33%, about $500, 4-6 years ago. I think this was around the time the subject was about Beach plans and rates increased for everybody in NC. This was to keep cost for those at and near beach from paying the full cost increase of rate. We all should compare rates 1 or 2 times a year. I've been too lazy to do so because it is very time consuming to read what one may cover and the other may not cover same thing equally. I just cancelled my cable last month and that was like I was pulling their teeth out without any pain meds. Took about 45 minutes and having to talk to 3-4 reps and calling 2 times since they disconnected my first call while transferring me to correct dept.

  • "Screen Name-8/20" Jul 25, 2014

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    Yeah, but that's not what's detailed in this story. Even the one person interviewed who experienced a rate change said...

    "I have never had a claim,” she said. “Never, nothing.”

  • "Screen Name-8/20" Jul 25, 2014

    Wow! So the Ponzi scheme the insurers are basically allowed to do, now they can raise rates whenever they danged well please, even WELL ABOVE the rate a state allows by law. Shameful!!!

    Shop around! There are always other insurance companies who'd be glad for your NEW business.

  • Burt Whitley Jul 25, 2014

    View quoted thread

    I'm not sure about this but I think one reason your rate may be high is Honda Civics is #2 on top 10 cars stolen. Honda Accord is #1. Here is list from lojack for 2014. Get a car like the Civic that is not stolen so much. Honda Accord ranks as the #1 most stolen. LoJack says that after Accord comes:
    2. Honda Civic
    3. Toyota Camry
    4. Toyota Corolla
    5. Chevrolet Silverado.
    6. Acura Integra
    7. Cadillac Escalade 8. Ford F-350 9. Nissan Altima 10. Chevrolet Tahoe

  • GoPanthers#1! Jul 25, 2014

    View quoted thread

    That is incorrect. There is at least one company that doesn't do consent to rate for homeowner policies, AAA. My agent Jason in Wake Forest got a policy for me that was not consent to rate. AAA doesn't even participate in the consent to rate program. Look up his info he should be able to help you.

  • miseem Jul 25, 2014

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    They have been busy with more pressing issues. Like putting solar powered fans in Jordan Lake to stir up the pollution, forcing Asheville to cede ownership of their water system, and giving Duke Power an out from cleaning up the coal ash ponds. You know, meddling with local government issues and public safety.

  • kodywoof Jul 25, 2014

    Seems to me if the law states insurers can raise rates on those that have filed claims and cannot on those without claims, then if rates are raised on those without claims the insurers are in violation. Some criminally. If I was the Commissioner I would be investigating every rate increase and for every wrongful increase I would issue a fine! My goofy Insurer called and said - "just sign the form, it's no big deal and won't affect you!". Mr Commissioner- You have all the authority you care to seize when it comes to Insurance matters!!! You also have a responsibility to those whom elected you. Stop this foolishness, you are the last line of defense!